15
D ISADVANTAGES OF FHA F INANCING With increased volume, long processing times (e.g. between 88 and 1,178 days from engagement letter to closing on transactions closed in the last few years by a typical lender) With increased volume and Risk Mitigation, uncertainty about results on deals and relationships with HUD Offices About 60 - 75% NC/SR, 85 - 90% existing property deals are approved; National Loan Committee is approving 90%

19
W HAT WE DO IN U NDERWRITING : Q UESTIONS W E A SK : Will they pay us back? Will enough people live here? When will they do so? How much will they pay for doing so? Will HUD approve it? Given specific program requirements -- e.g., 223f repair limits, Remaining Economic Life, DSCR/LTVs, commercial income standards, environmental requirements -- will it pencil out? Borrower, lender: Can we make money at this?